Foreign Exchange Facility Guarantee

EDC's Foreign Exchange Facility Guarantee (FXG) helps free up working capital for Canadian companies that purchase forward contracts from their financial institutions, enabling them to lock in the exchange rates as protection against foreign currency fluctuations.

Business Benefits

• Free up working capital: With FXG, companies can forego their financial institution’s requirement to put up to 15% collateral on forward contracts of two years or less.
• Solid balance sheet: With FXG, companies can accurately budget revenues and costs, better manage cash flow and protect their balance sheet.
• Confidence to pay suppliers upfront: You can pay suppliers without fear of losing money due to currency fluctuations.
• Business growth: With access to more cash, you gain the ability to take on more business.

Eligibility Criteria

EDC reviews your company’s managerial, technical and financial capabilities and assesses your relationship with your financial institution.

Summary

Coverage Details

When a Canadian company buys a forward contract, the financial institution might require collateral of approximately 15% - for example, $150 000 of the corporate line of credit is frozen as collateral for a million-dollar forward contract.

EDC guarantees the collateral amount, giving your financial institution the confidence to forego the 15% freeze and freeing up working capital for your business.

Cost

Pricing is based on several factors including exporter risks and forward contract-specific factors.

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Ontario Contact(s):
See National Contact.